Econ 153: Labor Economics Homework #4

| June 14, 2018

Econ 153: Labor EconomicsHomework #4InstructionSubmit your answer on iLearn before the due dateDue: Wednesday July 20, 11:30PM1. The supply curve of labor to risky jobs reveals:(a) how many workers are willing to offer their labor to the risky job as a function of thewage differential between the risky job and the safe job.(b) how many workers are willing to offer their labor to the risky job as a function of thewage paid to workers of the risky job.(c) how many workers are willing to offer their labor to the safe job as a function of the wagepaid to workers of the risky job.(d) the number of workers who dislike risky jobs.2. A negative compensating differential for a risky job can result if:(a) firms have market power and exploit workers.(b) some workers like risk and the demand for labor in risky jobs is relatively small.(c) the supply of workers who dislike risky jobs is large relative to the demand for workerswilling to work a risky job.(d) workers are fully informed about the risks on the job.13. When graphing a worker’s indifference curves in Probability of Injury (x-axis) versus Wage(y-axis) space, Al’s indifference curves are steeper than Pete’s indifference curve. In this case:(a) Al is more risk-loving than Pete.(b) Al requires a greater wage increase than Pete in order to willingly take on more risk.(c) Al will end up receiving a higher wage than Pete.(d) Both are risk neutral.4. A firm has the choice of offering "dirty" jobs that are likely to cause severe health problemsfor its workers or of offering "clean" jobs by installing safety equipment at a cost of $5 per hourper employee that will substantially reduce the chances of health problems. The firm will:(a) install the safety equipment if workers can ascertain whether they are working a dirty or aclean job.(b) never willingly choose to install the costly safety equipment.(c) install the safety equipment if workers are willing to be paid $3 per hour less in a cleanjob than in a dirty job.(d) willingly install the safety equipment if workers are willing to be paid $7 per hour less ina clean job than in a dirty job.5. When the government imposes safety regulations on a particular job or labor market, what ismost likely to happen?(a) Wages will increase.(b) Utility will increase if workers are able to correctly evaluate working conditions.(c) Wages will fall but utility will increase if workers misperceive on-the-job risk.(d) Firms that used to offer bad working conditions will be required to shut down.26. In a discrimination model, nepotism is best described as(a) a desire to maximize profit regardless of who one hires.(b) a preference to hire a certain type of worker, e.g., a worker of one’s same race.(c) a preference to hire an integrated workforce.(d) a desire to advance social causes over maximizing profits.7. Owners of men’s clothing stores traditionally discriminate against males when making hiringdecisions because they believe that male customers are more eager to buy clothing from femaleassociates. In reality, however, one’s sex does not affect one’s sales (i.e., one’s sex does not affectone’s productivity). Discrimination of this sort throughout the labor market has resulted inclothing stores paying male associates lower wages than they pay female associates. A newmen’s clothing store enters the industry without these prejudicial beliefs. Which of the followingoutcomes is not likely to come about?(a) The new store will hire more male associates than the typical existing store.(b) The new store will make greater profit than it would if it would hold similarly biasedviews.(c) The new store will likely have lower prices than existing stores.(d) The new store will have to hire female associates to compete with its competition.8. What is the main theoretical implication regarding the standard employer-based discriminationmodel?(a) Most firms are discriminatory.(b) Workers don’t care if firms are discriminatory.(c) Discrimination is not profitable.(d) Discrimination can only occur if there are exactly two types of labor (e.g., white andblack).39. Which one of the following statements concerning employee discrimination is not true?(a) Employers have no reason to employ a segregated workforce if there is employeediscrimination.(b) Employee discrimination does not affect the profitability of firms as long as firms canemploy segregated work forces.(c) Discriminating employees act as if their wage is less than it actually is if they areemployed by a firm that has an integrated workforce.(d) Employee discrimination will not produce a wage differential between equally skilledblack and white workers.10. There is a restaurant that employs only males to serve guests, only females to tend the bar,and a mix of male and female cooks and dishwashers. The dishwashers and cooks never come incontact with the customers. This hiring pattern is most indicative of(a) employer discrimination.(b) employee discrimination.(c) consumer discrimination.(d) statistical discrimination.

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